TDS spent $80 million to acquire Continuum, but only about $11.4 million was available from the proceeds to reimburse Davidson and Mooresville.

Oct. 18. By Dave Vieser. Anyone hoping for a quick end to the legal battle between Cornelius and Davidson concerning the former Mi-Connection sale will be disappointed to learn that progress has been pain- stakingly slow. In fact, the most recent meeting was in August, and no new meetings are scheduled at the moment.

Remember Adelphia? Mi-Connection? Continuum?

They’re actually all related. The cable system that serves Mooresville, Davidson and Cornelius began life as Adelphia, a massively troubled company whose founders landed in prison. Twelve years ago, Davidson and Mooresville bought the cable system, which proceeded to lose money.

In fact, $49 million in subsidies were paid by taxpayers in Mooresville and Davidson for over a decade.

Cornelius chose not to participate in the deal, although the company continued to serve customers in the town.

The system went back to the private sector when it was purchased by TDS Telecom on Dec. 31 of 2019.

‘A contract is a contract’

With the sale, Cornelius asked for $1 million, which they claim is owed to them. Davidson and Mooresville objected and filed a lawsuit in Iredell County Superior Court in February of 2020.

“Cornelius and Mecklenburg provided a huge customer base to Continuum from which Davidson and Mooresville drew significant revenue in terms of operating profit that helped pay for debt and expansion,” said Cornelius Commissioner Jim Duke.

“The fact that those towns made a bad business deal should not let them off the hook for their obligations. A debt is a debt! A contract is a contract,” Duke said.

Town officials quiet

Officials from both Davidson and Cornelius have little to say. “It’s an active legal case so we’re unable to really comment,” said Cornelius Town Manager Andrew Grant.

“This is ongoing litigation so we have no comment,” according to Amanda Preston, Davidson spokeswoman.

‘Interlocal’ agreement

So who stands the better chance of prevailing? A review of the interlocal agreement—a written contract between local government agencies—between Cornelius, Davidson, and Mooresville seems to support Cornelius’ position:

“In the case of a Sale of the Entire System…if the proceeds and other assets of the Joint Agency are sufficient to enable payment of all liabilities and debts, and the remaining (liquidation value) is $33,333,333 or less, then Cornelius is entitled to $1 million.”

TDS spent $80 million to acquire Continuum, but only about $11.4 million was available from the proceeds to reimburse Davidson and Mooresville. The $11.4 million was not sufficient to cover all liabilities and debts, according to the lawsuit.

Davidson and Mooresville officials say that the 2007 agreement only applies if there were profits with the sale.

A resolution doesn’t look like it will be happening any time soon.